A draft decision issued by state utility regulators Friday clears the way for the parent company of two of the state's largest natural gas utilities to lay off 67 workers.

The Department of Public Utility Control said in a 27-page ruling that it found "insufficient evidence" that the layoffs at Southern Connecticut Gas and Connecticut Natural Gas would prevent the companies from meeting "their obligations to provide safe and reliable gas distribution services or to provide for the safety of their employees."

Both companies are owned by Spanish energy giant Iberdrola and announced the layoffs in September after the DPUC decided in July to reject their requests for rate increases.

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The DPUC doesn't normally become involved when the utilities it regulates announce layoffs. But commissioners at the regulatory agency decided in late September to put a hold on the layoffs to assess whether the layoffs, which included technicians that respond to gas leaks and other problems, would pose a safety threat.

"Absent such evidentiary support that the Companies' proposed layoffs will affect safe and reliable delivery of natural gas and the safety of ... employees, the Department will leave to the Companies' management to prudently manage their labor force," the draft decision said in part.

"The Department will require substantial compliance filings to monitor closely and to ensure that the Companies' exercise of its workforce does not lead to degradation or reduction in safety and reliability."

The DPUC will hear oral arguments on its draft decision Feb. 3 and will issue a final decision in the case Feb. 10.

State Attorney General Richard Blumenthal said his office will encourage the DPUC to revise its draft decision and to order further rate reductions for the companies if they are allowed to go ahead with the layoffs.

"While I welcome the DPUC's apparent determination to heighten its scrutiny over the companies, these layoffs could severely endanger consumer service and safety," Blumenthal said. "We will continue to fight on behalf of consumers, as well as gas company employees who serve them, and will monitor closely and strongly the reports submitted monthly."

Officials representing the unions of the workers who are facing the layoffs were not available for comment Friday. The two unions are the Connecticut Independent Utility Workers at CNG and United Steel Workers Local 12000 for SCG.

A spokesman for the two utilities was also not available for comment Friday.